WASHINGTON, May 8, 2017 – In order to win antitrust approval for its $66 billion acquisition of Monsanto, Bayer said today that it has agreed to sell its Liberty branded agro-chemicals and Liberty Link trait technology.
The announcement comes after South Africa's Competition Commission weighed in over the weekend, asking for about $2.5 billion in asset sales.
"Bayer has agreed to these conditions and is evaluating how best to execute the imposed divestiture," the German group said in its statement.
While South Africa is a relatively small market for the two global agribusinesses, the move marks the first time Bayer publicly acknowledged it has to sell the Liberty brands and traits, which compete with Monsanto's Roundup and Roundup Ready seeds. The announcement also comes before other large countries have made statements about the potential for required divestitures.
The planned divestitures are expected to be required by anti-trust regulators in larger markets, such as the United States and the European Union, where an application for approval has yet to be made. But at this time, neither has made a formal request.
"Bayer will continue working with regulators globally with a view to receiving approval of the proposed transaction by the end of 2017," the company said in a statement.
At the company’s annual shareholder meeting in late April, CEO Werner Bauman said that “through the transaction, we intend to create substantial additional value in the long term.”
In terms of business, 2016 was another record year for Bayer, Baumann noted, adding that “both sales and adjusted EBITDA were higher than ever before.”
“The market environment for the agriculture business (Crop Science) remained weak last year, primarily in Latin America,” the company noted in a release on its corporate web site. “Sales nonetheless held steady year on year at 9.9 billion Euros. The decline in Latin America was compensated for by gains in the other regions. Sales of the Animal Health business advanced by 4.8 percent to 1.5 billion Euros.
UPDATED: At 6:30 am, this story was updated and corrected to note that the Competition Commission of South Africa would require the divestiture of Bayer's global Liberty Link Trait Technology, not the seeds business.
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